LOCAL PANEL HAILS FEMA QUAKE RESPONSE\Complaints aired on aid still due; state says $50 million owed.

Byline: Tony Knight Daily News Staff Writer

Federal disaster aid flowed quickly and smoothly to Los Angeles immediately after the Northridge Earthquake, state and local leaders told a panel of congressmen Friday at a hearing in the San Fernando Valley.

But disputes over the amount of aid still due have arisen in recent months between officials in California and Federal Emergency Management Agency officials in Washington, according to local leaders.

"Our point is we simply need to know going in what the rules are," said Richard Andrews, director of the state Office of Emergency Services.

Still, Andrews and representatives of the National Guard, the county Office of Emergency Services, and California State University, Northridge, all praised the quality and quantity of federal aid in the weeks and months after the magnitude-6.7 quake.

The special hearing by the House Subcommittee on Government, Management, Information and Technology was convened by chairman U.S. Rep. Stephen Horn, R-Long Beach, to evaluate the quality of the federal government's response to the disaster.

Despite the disputes over continuing funding issues, Horn said his overall impression is that federal agencies did a good job responding to the costliest disaster in U.S. history.

"What we've learned is that this went rather smoothly," said Horn. "I think everyone can be pleased that they got the job done in record time and they met the needs."

FEMA director James Lee Witt told the congressmen that the agency handled the disaster with few glitches, but acknowledged that in the rush to pump money into the area after the Jan. 17, 1994, quake, some people who received checks weren't eligible for them. FEMA released $3.4 billion in direct disaster aid.

"Yes, there were some that did not deserve to get that money," Witt testified. "But we were 85 percent accurate, and there were some people who sent the checks back because they didn't need it."

However, there were some gripes about federal relief.

Andrews complained that the agency now has refused to pay $50 million that had been committed to cover state administrative costs associated with the disaster.

FEMA regional disaster coordinating officer Leland Wilson said the agency does not think it should pay California's administrative costs.

"Even if they were promised, if they were promised in error outside of national policy, then they have to be de-obligated," Wilson said.

FEMA also is stalling on funding repairs to 20 area hospitals, including Northridge Hospital Medical Center, Granada Hills Hospital and Kaiser Panorama City Hospital, Andrews said.

Wilson said Witt has offered a compromise on the hospitals that should get local officials $500 million to $700 million more in repair funding.

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Photo FEMA's James Lee Witt addresses a House subcommittee that met at CSUN to discuss the federal response to the 1994 quake. Phil McCarten/Daily News